Pre-Approval Should Always Be Your First Step

Pre-Approval Should Always Be Your First Step

In many markets across the country, the number of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:

Capacity: Your current and future ability to make your payments

Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash

Collateral: The home, or type of home, that you would like to purchase

Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.

“This was our first time buying a house and we were very glad that we had help from Kent. He gave us all the information we needed and good advice on securing the home we wanted when there were other interested buyers. I felt like things were favorable for us as well as the sellers.”

“I have used Kent to buy a home, sell a home, and to buy a home again. I get anxiety going through the whole process but Kent was always there to touch base and reassure me. Honestly, his professionalism and then his friendship are the reasons why I always turn to him when I'm ready to move. Also, his team does a great job of follow upand are quick to get the ball rolling. Overall the ending has always been a great experience for me.”

“We have purchased and sold four homes prior to our latest purchase of a home. We used the services of J. Kent Erickson for the sale of our last home and the purchase of the one we currently occupy. We were pleased with the services of our previous agents, but Kent stood out above them in all respects. We were truly amazed at the kind of effort and attention he was able to provide. We have recommended him to other family members and friends and would never turn to anyone else as long as he is available.”